Why the Dow Limped Into the Week

Dow down 36 ahead of two-day Fed meeting

Three out of four blue-chip stocks backtracked on Monday as Wall Street considered June's slip in U.S. home orders and anticipated the beginning of the two-day Federal Open Market Committee meeting tomorrow. The slowdown in home sales, while sounding ominous, should be taken with a grain of salt: Sales fell just 0.4% from May, when they reached a six-and-a-half-year high. The Fed, while expected to keep rates absurdly low this week, has investors on edge as markets worry loose money policies may be ending soon. The Dow Jones Industrial Average(DJINDICES:^DJI) fell 36 points, or 0.2%, to end at 15,521.

Caterpillar(NYSE:CAT) stock refused to lose -- as it had in the previous four trading sessions -- and added 1.2% after announcing a $1 billion share buyback plan. The shares in particular will be bought back from a French bank. With a market cap around $54 billion, the repurchase agreement will materially reduce the number of shares outstanding, spreading the company's earnings among a smaller pool of shareholders. Caterpillar seems to think its stock is pretty cheap right now. It also bought back $1 billion of its stock in June.

Telecom was the best-performing sector of the day, and Verizon Communications(NYSE:VZ) played its own bullish role, tacking on 0.9%. It's looking like more and more of a sure thing that Verizon will expand its wireless network into Canada to boost its pool of potential customers. The would-be Canadian competition is taking notice, too: The Canadian Industry minister is sitting down with the country's anxious top telecom execs today to ease their concerns over Verizon's invasion.

Hewlett-Packard(NYSE:HPQ), on the other hand, hasn't been causing any skittish foreign execs to huddle with top lawmakers recently. While HP is the second-largest global PC vendor by volume, it was the first-largest last year. Not only that but the PC market itself is on a well-publicized secular decline caused largely by the surging tablet market, a fact highlighted in a Sunday New York Times article. HP shares lost 1.2% Monday.

Finally, Bank of America(NYSE:BAC) shed 1.4% as Philadelphia became the latest municipality to file suit against banks allegedly involved in the widespread Libor interest rate fixing case. Philadelphia claims that between 2009 and 2011, the city was essentially scammed out of more than $100 million by an illegal collusion by major banks misreporting real interest rates. In a separate case today, the Charlotte-based bank was sent back to court for mishandling a loan to a casino development project in the midst of the financial crisis.